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5 Top (& Practical) Reasons Why Your Business Isn’t Scaling Up

Have you ever wondered why your business is just not scaling up despite all your efforts?

Why is that a few business owners can scale their start-ups to global level & others cannot? How is that a small pizza store (named Domino’s) became a global giant?

Most entrepreneurs struggle to find answers to the aforesaid questions. Well, the good news is that scaling up is not ‘luck’ but a result of successful implementation of time-tested principles & rules listed below. Yes, you too can scale up your business like global enterprises have done it (& are doing it).

So, let’s dive in!

SCALING UP

1. Business Processes

For a second, imagine your business as a machine. Now, what does a machine do?

Simple. Take input, process the input & deliver output. Right? Same applies to your business as well. Input for your business can be the raw material or people, the process can be business process & output can be final product or customer experience.

In simple terms, the equation of a business (like a machine) is Input (Raw material or people) >> Process (Business processes) >> Output (Finished product or customer experience)

If you take Domino’s as a case, then you will find that their business operation functions like a perfectly well-oiled machine (Next time when you order a pizza, take note of their flawless processes at each step from ordering to delivery)

Well-crafted business processes can turn your business into a machine & will help in scaling up with new stores/branches easily. How? Copy & paste the machine(processes) to new stores/branches, simple!

2. Delegation & Reporting

Delegation is one of the MOST important (& ignored) skills relating to people management.

To scale up fast, you need to delegate your operational power & responsibility to your immediate juniors. This delegation will ensure that you get more time to concentrate on strategic areas like growth & expansion.

Now, you must be thinking, “If I delegate my operational power & responsibility to my juniors, then will they not make errors (or blunders)?” My answer: No, they won’t if you have proper reporting framework.

Reporting framework means a structure or policy that results in the flow of data from bottom to top. For example: If a business owner has delegated the responsibility of approving cash payment voucher to accounts manager then the business owner would like to be reported on total cash payment on a daily basis.

In simple terms, the equation comes to: Delegation of operational functions + Reporting framework = More time to concentrate on strategic areas.

3. Internal Control System

An internal control system is an accounting & auditing term which means a system in place to avoid error & fraud.

Taking the aforesaid example: To avoid fraud, the business owner may implement a policy where the cash payment voucher above a certain threshold needs to signed by both accounting manager & operational manager. (This is internal control system!)

Now, this system is important because you won’t be able to scale up your business if there is some kind of leakage in the form of error or fraud (like stock or cash misappropriation)

In simple terms, the equation is: Internal control system = Avoiding leakage in the form of error & fraud.

4. Hiring

You need to hire ‘leaders’, strictly only ‘leaders’. Wait! My definition of ‘leader’ is slightly different. By ‘leader’, I mean an employee who can pull off on his or her own independently. This has not got anything to do with his or her designation.

Example: As a business owner, imagine an emergency situation (like fire) in your office or business place. Now, in that situation, who (among all your employees) do you think will step up & act independently? Congrats! you have found a ‘leader’.

To test this leadership skill, you may simply ask a question like “How will you decorate this building within 2 hours independently?” to all candidates before offering a job.

In simple terms, the equation comes to: Hiring leaders = Flawless execution of business processes, delegation-reporting & internal control system

5. Product or Business Model

Last but not the least, your product or business model itself should help in scaling up. Example: In E-commerce, marketplace model (like Amazon) ensures faster growth than inventory model.

If you are dealing with products which are physical in nature, then global or national acceptability of your products is a prerequisite before chalking out a scaling (up) plan.

If you are dealing with digital products or services, then you need to remove barriers like language, payment method, local laws etc. (take Facebook as an example which supports multiple languages & payment methods).

In simple terms, the equation comes to: Right product or business model: Prerequisite to scaling up.

Conclusion

So, the secret has been revealed.

Scaling up is all about getting product, processes, data flow, people management & ethics on the right track.

How do plan to scale up your business? What do you think of the aforesaid strategies? Comment below.